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German Government Pushes Electricity Costs To Record High

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Daniel Wetzel, Die Welt

The green energy transition is getting more and more expensive. Taxes and duties on the electricity price reached a high of almost 32 billion Euros this year. And further charges are already in sight.

So stark steigen die Energiekosten an

Source: German Association of Energy and Water (BDEW)

The green energy transition of the Federal Government is ever more increasing the cost burden on German consumers. According to the recent electricity price analysis by the German Association of Energy and Water (BDEW), taxes on electricity consumption will increase by about 25 percent to a record level of 31.6 billion Euros this year.

At the beginning of this legislature period, four years ago, the state-induced burden for electricity consumers were around 17.1 billion Euros, about half as costly as today. The spokesperson of the BDEW, Hildegard Müller, warned consumers about further electricity price rises in future: “In the coming two to three years, further significant costs will accrue.”

According to the data, a monthly electricity bill for a three-person household increased this year by 10%, from 75.51 to 83.80 Euro. Since the liberalisation of the energy market in 1998 the price of electricity has risen by 68 percent. The utility operators, however, are not to blame for this development: the cost components, which can be influenced by companies, i.e. production, transport and distribution, have remained roughly constant at EUR 41.50 per month in the last five years.

According to long-term statistical analysis, the energy companies are not seen as price drivers: Since 1998, they increased the prices of production, transport and distribution by eleven percent. During the same 15-year period, however, government charges and taxes increased by around 243 percent. Meanwhile, government-induced duties contribute for more than 50 percent of the electricity price.

Green energy producers collect 20.4 billion Euros this year

By far the largest cost block is the Renewable Energy Levy (EEG), which subsidises green energy production. According to the BDEW numbers, the “EEG levy” rose from 14.1 billion to 20.4 billion Euros in just one year, radically like never before. The main reason was the ongoing and fierce expansion of highly subsidised solar power production.

According to industry statistics, German households finance most of the green energy subsidies. Households have to pay an EEG surcharge of 7.2 billion Euros this year alone. In addition, consumers will be affected by indirect costs because industry, trade and commerce pass on their rising energy costs to a large extent on product prices.

Industry was the second largest paymaster of the green energy transition, with 6.1 billion Euros paid for this year. Trade, small enterprises and services contribute EEG costs of 4 billion Euros, while public institutions contributed 2.4 billion Euros and agriculture 0.5 billion Euros. All economic sectors, including transport, have been contributing 10.8 billion Euros, i.e. a little more than half of the EEG costs, according to BDEW statistics.

Translation Philipp Mueller

Full story (in German)